The Tariffs proposed by Donald Trump’s administration in the United States 25% to imports from their commercial partners, Mexico and Canada, would affect one third of commercial vehicle sales in the United States., According to a study published by S&P Global Mobility.
On February 1, the United States announced new 25% tariffs to imports of almost all goods in Canada and Mexico, including cars and trucks. The date of entry into force of the new tariffs, which was initially scheduled for February 4, It was paused by President Trump After talking with its Mexican and Canadian counterparts, and has been postponed to March 4.
In combination with the immediate retaliation measures of Canada and Mexico, the impact of tariffs on the road transport industry It could be significant, with the potential to depress truck volumes in the short term and, over time, reformulate the manufacture of commercial vehicles, the study points out.
S&P Global Mobility points out that tariffs are particularly sensitive to the medium and heavy commercial vehicle industry (MHCV), which supplies trucks and buses of vehicular gross weight classes (GVWW) 4 to 8, or more than 14,000 pounds.
From the formation of the commercial agreement between Mexico, the United States and Canada (T-MEC) and the previous Free Trade Agreement of the North America (NAFTA), the proportion of commercial trucks imported from Canada and Mexico to the United States. It has more than duplicated and now represents almost a third of the demand for new vehicles in the United States.
In addition, the exhibition varies greatly according to the type of vehicle and the brand. While more than 40% of the heaviest trucks in class 8 sold in the United States are imported from Canada and Mexicojust a little more than a quarter of those in the market of classes 4 to 7, which are lighter, come from those countries.
The lowest proportion of all is that of imported bus and motorhome, with less than 5%. As for brandsthe links with plants in Canada and Mexico They also vary widely.
The extremes are represented by RAM (100% production in Mexico) and the Volvo brand (0% production in Mexico). Many other brands are at an intermediate point, with tools sets in two or even three of the countries of North America.
Interruptions in the supply chain with tariffs
In addition, the report indicates that the suppliers of commercial vehicles of the United States have little or no capacity to absorb the cost increases of 25% taxes to the goods from Canada and Mexico, and original team manufacturers They are in a barely better position. In addition, some pieces and systems can cross borders several times during the production process.
The large displacement engines for class 8 trucks that are assembled in the three countries almost entirely in the United States and are sent to Canada or Mexico for installation in vehicles. These engines also contain pieces from neighboring countries.
Yes ok S&P Global Mobility He explains that it is difficult to calculate the impacts on the costs throughout the supply chain, this situation makes pricing increases for buyers of US commercial vehicles, if the country promulgates new tariffs.
Impact of tariffs on commercial truck prices
Likewise, S&P Global Mobility estimates that the net impact of tariffs on new truck prices in United States (MHCV) It could be around 9%, after taking into account the expected depreciation of Canadian and Mexican currencies and the relative importance of imported vehicles in the combination.
If these tariffs were maintained until the end of the year, an increase in such could reduce the demand for new commercial vehicles in the United States in the 2025 calendar year up to 17%, with an average price elasticity of the demand observed in the past.
This would cancel the whole Growth previously expected for this year And it would result in a downward market in the 2025 calendar year compared to the 2024 calendar year, on equal terms.
The duration of the imposition of tariffs affects differently
Finally, the study indicates that in addition to the level, the duration in which these tariffs are imposed, which until now is unknown. Short -term tariffs for the road transport sectorif applied only for a few weeks, they can affect prices and profitability.
In addition, the road transport industry could respond by reprogramming the movements of vehicles and parts through the border, to avoid or minimize the tariff impact.
Taxes that last several months or more than a year will affect the volumes of the transport industry and, perhaps, result in some transfer of the production of their neighbors to the United States, through higher line and shift rates.
In addition, tariffs that are perceived as “permanent” can reconfigure the manufacturing footprint and commercial flows in a more fundamental way. The MHCV forecast team of S&P Global Mobility considers unlikely a scenario with high tariffs more or less permanent among the three members of the T-MEC.
On the contrary, if 25% tariff Half mandate in the United States, in 2026.
“At the moment, in the midst of the recent volatility around the application of the law, we maintain a position to ‘wait and see’ in the forecast of commercial vehicles. Although in the prognosis of the first quarter of 2025 we partially take into account The possibility of New 25% tariffs in Canada and Mexicothe introduction of import rights of 25% is not included in our base cases, “concludes the study.
